08 November 2010

HSBC Stands Up To Banking Levy

On Friday 5th November, HSBC renewed the prospect that it might quite London following George Osborne’s banking levy; this was coupled with the outlines to halt inflated bonuses for bankers.

The bank commented that such changes would mean that HSBC could not sufficiently compete with other banks because they were no longer on a “level field” with their competitors.

The banking levy by Osborne would mean that HSBC-as well as all other banks would have their annual income capped to £2.5bn with no capacity to stretch beyond this limit. HSBC publicly spoke out about the changes during a series of conference calls with journalists and City analysts.

The chief executive of the bank, Mr Geoghegan complained that HSBC was being targeted simply because it was based in London. He commented that this situation was akin to “tax on emerging markets growth” which is where HSBC accumulates most of its income.

On the situation Mr Geoghegan commented, "Policymakers need to understand the consequences on the wider economy and growth." He continued, "Along with many other international banks, HSBC already complies with the Financial Stability Board's global principles on remuneration. If the EU takes those principles further and applies additional requirements to European firms operating in emerging markets, it would place those firms at a disadvantage to their regional competitors and to those based in North America."